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Alan Howard-backed Crypto Hedge Fund One River Files for Carbon-Neutral Bitcoin ETF

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by Bhushan Akolkar · 3 min read
Alan Howard-backed Crypto Hedge Fund One River Files for Carbon-Neutral Bitcoin ETF
Photo: Unsplash

This will be the first-of-its-kind Bitcoin ETF that will acquire carbon credits against the Bitcoin use with each of the MCO2 tokens representing certified reductions in greenhouse emissions.

Although Bitcoin (BTC) has been trading under pressure over the last few weeks, hedge funds continue to show confidence in the digital asset. On Monday, May 24, digital asset hedge fund One River filed for a carbon-neutral Bitcoin ETF with the US Securities and Exchange Commission (SEC).

Bitcoin’s topic of high-energy consumption has been a topic of hot debate once again in the crypto space. This happened recently as Tesla dropped Bitcoin payments two weeks back. The big news is Elon Musk recently held talks with North American miners to promote green crypto mining initiatives.

The Bitcoin exchange-traded fund filed by One River will incorporate the purchase of carbon credits to make BTC use carbon-neutral. Interestingly, the plans for One River’s Carbon Neutral Bitcoin Trust were first floated last month in April 2021. For this initiative, One River has also partnered with the carbon credit platform MOSS. Speaking to Bloomberg, One River CEO Eric Peters said:

“There’s a lot of talk about the carbon footprint. We decided it’s time to stop talking and start doing something about it.”

One River Carbon Neutral Bitcoin Trust to Acquire Carbon Credits

As per the S1-filing with the US SEC, One River shall list its Carbon Neutral Bitcoin Trust on the New York Stock Exchange (NYSE). The Bitcoin ETF will basically track the performance of the asset using the MVIS One River Carbon Neutral Bitcoin Index.

As per the filing, this Index fetches Bitcoin price feeds from the “eligible bitcoin spot markets and volume-weighted median price average (“VWMP”), calculated over 20 intervals in rolling three-minute increments with adjustments to reflect the current spot price of carbon credits necessary to offset the estimated carbon footprint attributable to each bitcoin”.

Besides, the Trust will purchase the retiring carbon credits that account for the estimated carbon emissions linked to Bitcoins. Thus the Trust will purchase MCO2 tokens issued by MOSS each representing certified reductions in greenhouse emissions.

“Each circulating MCO2 token is intended to represent a claim on a certified carbon credit held in an aggregated pool of carbon credits within the Moss account on the Verra Registry. The Trust will initially acquire MCO2 tokens from Moss from time to time at pre-negotiated prices in an amount sufficient to offset the estimated carbon footprint of the bitcoins held in the Trust’s portfolio, with a view towards tracking the performance of the Index. Upon expiration of its agreement with Moss in April 2031, the Trust will either enter into a replacement agreement, or alternatively acquire MCO2 tokens or similar carbon credits at then current spot prices for such instruments,” the filing reads.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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